Can India’s Surging Coffee Exports Fill In Gaps From Climate Change-Challenged Brazil And Vietnam? – CoffeeTalk

India’s coffee exports have seen a significant increase, with the country exporting $1.2 billion worth of coffee in FY24 and crossing the $1 billion mark in just the first few months of FY25 until October. The surge in demand is attributed to the country’s production of two main coffee varieties: Arabica and Robusta. Robusta accounts for over 70% of India’s coffee production and is a favorite for instant coffee manufacturers worldwide due to its strong flavor and affordability.

However, the steep rise in global coffee prices is the real game-changer. Robusta prices have reached multi-decade highs this year, climbing more than 60% in 2024 alone. This is due to supply issues in major coffee-producing countries, such as Brazil, the world’s largest coffee producer, dealing with erratic weather patterns due to climate change. Vietnam, the second-largest supplier, is hedging against unpredictable climate risks by shifting some of its focus to growing Durian, a pungent fruit that has seen a 400% surge in global demand.

India’s uniqueness sets it apart from its global competitors, as it is grown in natural forests using traditional methods. In fact, India is the only country where all coffee is grown under shade, hand-picked, and sun-dried. This eco-friendly approach aligns perfectly with the European Union’s Deforestation Regulation (EUDR), which bans coffee imports from regions deforested after 2020. India’s sun-drying process is way greener than the mechanical dryers used in Europe that contribute to carbon emissions.

However, the EUDR compliance burden on growers can be huge, as it requires technological and financial resources. Indian growers will now need expensive tech upgrades like GPS mapping and digital traceability systems, which small farmers can barely afford. With endless paperwork, audits, certifications, and compliance, it quickly starts looking like a nightmare.

The Coffee Board is working on a platform to help Indian coffee producers comply with EUDR, but since it will take some time to roll out, coffee exports to the EU might face some bumps in the road in the meantime. Ecuador, a South American nation, is far ahead of India in producing sustainable coffee, exporting its first container of sustainable coffee with deforestation-free certification to Italy in July 2023.

India is not immune to the effects of climate change, as irregular rainfall patterns harm the yield and quality of coffee. Rising labor costs and shipping costs are also challenges for Indian coffee farmers. However, there is room for optimism, as India’s global coffee export share is just around 4%. Expanding its presence in markets like China, home to nearly 50,000 branded coffee outlets and growing fast, could help India become one of the top coffee exporters.

Read More @ Finshots